Business Owners: Paycheck Protection Program Update
Published Tuesday, April 7, 2020, 8 p.m. EST
- For business owners who have not yet submitted an application for Paycheck Protection Program (PPP) financial assistance from the U.S. Government, there's good news and bad.
PPP offers small businesses a forgivable loan to help retain employees during the social-distancing mandate spawned by the COVID-19 crisis. PPP is a $349 billion program offered on a first-come, first-served basis. The bad news is that it will run out of money. The good news: The program is reportedly expected to receive additional federal funding in the days ahead. So, unless your business is sitting on sufficient levels of available liquidity to fund your business operations for the next six or 12 months, you may want to swiftly gather the necessary financial data and paperwork and submit your PPP application ASAP.
PPP is the primary program the U.S. Government has funded for small businesses owners with fewer than 500 employees. As long as a business owner uses the loan proceeds for payroll and other specified eligible expenses, the loan will be forgiven by the U.S. Government.
This financial relief program may be used by restaurants, professional services and other small businesses. If you are a sole proprietor, independent contractor and are self-employed, you may also qualify for a PPP loan. Even if your business turns out to be more profitable during the crisis, you may still qualify for a forgivable loan due to the unprecedented level of uncertainty and the determination of the United States government to rescue the economy.
Applying for a PPP loan can be a critically important business planning decision for a small business owner to make amid the swirling COVID-19 crisis.
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